NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Sentiments and Economic Activity: Evidence from U.S. States

Jess Benhabib, Mark M. Spiegel

NBER Working Paper No. 23899
Issued in October 2017
NBER Program(s):Economic Fluctuations and Growth Program

We examine whether sentiment influences aggregate demand by studying the relationship between the Michigan Survey expectations concerning national output growth and future economic activity at the state level. We instrument for local sentiments with political outcomes, positing that agents in states with a higher share of congressmen from the political party of the sitting President will be more optimistic. This instrument is strong in the first stage, and our results confirm a positive relationship between sentiments and future state economic activity that is robust to a battery of sensitivity tests.

download in pdf format
   (1507 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23899

Published: Jess Benhabib & Mark M Spiegel, 2019. "Sentiments and Economic Activity: Evidence from US States," The Economic Journal, vol 129(618), pages 715-733. citation courtesy of

Users who downloaded this paper also downloaded* these:
Angrist, Caldwell, and Hall w23891 Uber vs. Taxi: A Driver’s Eye View
Persson w23823 Attention Manipulation and Information Overload
Mian, Sufi, and Khoshkhou w21316 Government Economic Policy, Sentiments, and Consumption
Acharya, Benhabib, and Huo w23136 The Anatomy of Sentiment-Driven Fluctuations
Chen, Hanson, and Stein w23843 The Decline of Big-Bank Lending to Small Business: Dynamic Impacts on Local Credit and Labor Markets
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us